Labour has today urged Chancellor Rishi Sunak to act today to give stretched businesses much-needed certainty by extending the existing business rates holiday and reduction in VAT.
Anneliese Dodds, Labour’s Shadow Chancellor, has argued that uncertainty over the length of the business rates holiday is damaging business confidence – and that businesses can’t wait another month until the Budget to know whether the holiday will continue beyond the 2020-1 tax year.
Without an extension, businesses that have a vital role to play in powering Britain’s recovery will be hit with the additional sunk cost of business rates just when they are trying to get back on their feet.
Dodds is urging the Westminster Government to be smarter by following the example of Labour-run Wales and capping relief so that support is targeted to those that need it most.
The Shadow Chancellor is also calling for the temporary 5% reduced rate of VAT for the hospitality, tourism and culture sectors to continue for another six months or until three months after the lifting of health restrictions – whichever comes later. The reduced rate is set to expire on 31st March, when it will return to 20%.
These sectors have been among those hit hardest by the pandemic. Extending the VAT cut will boost demand for their services in the critical period after restrictions have been lifted, when consumer confidence is likely to still be relatively low.
Anneliese Dodds MP, Labour’s Shadow Chancellor, said:
“Labour is the party of work and business. We understand that businesses create the jobs and drive the growth that will build the recovery. That’s why they need breathing space, with a targeted business rates holiday and an extension of the reduced rate in VAT.
“The Chancellor has acted at the last minute time and again during this crisis – and that dither and delay has created uncertainty for businesses, cost jobs and threatened our recovery.
“Britain can’t afford the Chancellor to make the same irresponsible mistake all over again. He must announce these continued tax cuts now, not wait another month and risk even more job losses.”